New Build Contracts vs. Resale Homes: What Every Buyer Should Know
Buying a home is one of the biggest financial commitments you’ll ever make. For many buyers, that choice comes down to purchasing an existing home or signing a new build contract with a builder. While resale homes have their own considerations, new construction contracts often contain hidden risks that can cost buyers thousands of dollars — or leave them trapped in one-sided agreements.
At Hunter Law Group, we help buyers review and negotiate new build contracts to protect their rights and finances. Before you commit to a new construction home, here are the key issues every buyer should understand.
Fixed Price vs. Cost-Plus Contracts in New Construction
One of the first questions to ask is how the builder sets the price:
Fixed Price Contract: The builder agrees to complete the home for a set amount. While upgrades may add to the cost, the overall budget is relatively predictable.
Cost-Plus Contract: The buyer pays actual labor and material costs plus the builder’s fee. These contracts expose buyers to price fluctuations and make it difficult to control the final cost.
Why this matters: Builders often prefer cost-plus contracts because they shift the risk to the buyer. An experienced real estate attorney for new construction can review the pricing structure and help negotiate protections, such as caps on cost increases.
Who Pays the Real Estate Agent’s Commission?
In a typical resale transaction, the seller pays the real estate agent’s commission. But with new build contracts, the rules change:
Some builders include commission in the purchase price.
Others make the buyer responsible.
A few refuse to work with outside agents altogether.
Why this matters: Commission misunderstandings can cost buyers thousands of dollars. At Hunter Law Group, we ensure you understand exactly who is paying and that it’s clearly spelled out in your contract.
Can the Buyer Terminate a New Build Contract?
Resale contracts usually give buyers escape options if financing fails, the inspection reveals issues, or the appraisal falls short. But many new construction contracts severely restrict buyer termination rights.
Some allow only the builder — not the buyer — to cancel.
Others let the builder keep deposits if the buyer backs out, even for good reason.
Why this matters: Without clear termination rights, buyers risk losing large deposits. A contract review can highlight these risks and, in some cases, negotiate more balanced terms.
Hidden Costs in New Construction Contracts
The “base price” of a new build is rarely the final price. Buyers often encounter:
Upgrade charges (cabinets, flooring, finishes)
Lot premiums
Utility hook-up fees
Landscaping and fencing costs
Escalation clauses that raise prices if labor or materials increase
Why this matters: These extras can add tens of thousands of dollars. A contract review attorney for new builds can clarify which costs are included, which are optional, and whether the builder can increase prices mid-construction.
Completion Dates and Builder Extensions
When buying a resale home, you usually close within 30–60 days. With new builds, completion dates are far less certain.
Many contracts give only vague timelines (“12 months from permit issuance”).
Builders often reserve the right to extend completion dates at their discretion.
In many cases, buyers have no remedies if the project drags on.
Why this matters: Buyers can be left in limbo—paying rent, juggling temporary housing, or watching interest rates rise—without any recourse. A lawyer can identify whether completion dates are firm, what delays are permitted, and whether you have any remedies if deadlines are missed.
Why Hire an Attorney Before Signing a New Build Contract?
Builders draft contracts to protect themselves — not you. Their sales teams may downplay concerns by saying “this is just standard language,” but there is nothing standard about risking your deposit, paying unexpected costs, or waiting indefinitely for your new home.
An experienced real estate attorney for new construction contracts can:
Spot one-sided or risky provisions
Explain how pricing, deposits, and timelines affect you
Negotiate for fairer terms
Protect your ability to cancel or recover deposits
Give you peace of mind before making a life-changing investment
The Bottom Line
Buying a new construction home can be exciting, but new build contracts carry risks that resale buyers rarely face. From unclear pricing to restrictive termination rights and open-ended timelines, the fine print matters.
Before you sign, call Hunter Law Group. We’ll review your contract, explain your rights, and help you move forward with confidence.
Contact Hunter Law Group today to schedule a contract review. Don’t sign away your protections — call us before you sign.